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Derivative Instruments | 3 Months Ended
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Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments Oil and Natural Gas Contracts The Company uses commodity based derivative contracts to reduce exposure to fluctuations in oil and natural gas prices. While the use of these contracts limits the downside risk for adverse price changes, their use may also limit future revenues from favorable price changes. For the three months ended December 31, 2021 and 2020, we have not designated our derivative contracts as hedges for accounting purposes, and therefore changes in the fair value of derivatives are included and recognized in other income (expenses) in the consolidated statements of operations. As of December 31, 2021, the Company's oil and natural gas derivative instruments consisted of the following types: •Fixed Price Swaps – the Company receives a fixed price for the contract and pays a floating market price to the counterparty over a specified period for a contracted volume. •Costless collars – the combination of a put option (fixed floor) and call option (fixed ceiling), with the options structured so that the premium paid to purchase the put option is offset by the premium received from the sale of the call option. If the market price exceeds the call strike price or falls below the put strike price, we receive the fixed price and pay the market price. If the market price is between the put and the call strike price, no payments are due from either party. •Basis Protection Swaps – basis swaps are settled based on differences between a fixed price differential and the differential between the settlement prices of two referenced indexes. We receive the fixed price differential and pay the differential between the referenced indexes. The following table summarizes the open financial derivative positions as of December 31, 2021, related to oil and natural gas production:
|  |  |  | Weighted Average Price
Calendar Quarter |  | Notional Volume |  | Fixed |  | Put |  | Call
|  |  |  | ($ per unit)
Oil Swaps (Bbl) |  |  |  |  |  |  |  |
Q1 2022 |  | 345,000 |  |  | $ | 57.47 |  |  | $ | — |  |  | $ | — |
Q2 2022 |  | 345,000 |  |  | $ | 57.47 |  |  | $ | — |  |  | $ | — |
Q3 2022 |  | 270,000 |  |  | $ | 56.03 |  |  | $ | — |  |  | $ | — |
Q4 2022 |  | 270,000 |  |  | $ | 56.03 |  |  | $ | — |  |  | $ | — |
2023 |  | 720,000 |  |  | $ | 53.27 |  |  | $ | — |  |  | $ | — |
Natural Gas Swaps (Mcf) |  |  |  |  |  |  |  |
Q1 2022 |  | 360,000 |  |  | $ | 3.26 |  |  | $ | — |  |  | $ | — |
Q2 2022 |  | 540,000 |  |  | $ | 3.26 |  |  | $ | — |  |  | $ | — |
Q3 2022 |  | 540,000 |  |  | $ | 3.26 |  |  | $ | — |  |  | $ | — |
Q4 2022 |  | 540,000 |  |  | $ | 3.26 |  |  | $ | — |  |  | $ | — |
Oil Collars (Bbl) |  |  |  |  |  |  |  |
Q1 2022 |  | 90,000 |  |  | $ | — |  |  | $ | 35.00 |  |  | $ | 42.63 |
Q2 2022 |  | 90,000 |  |  | $ | — |  |  | $ | 35.00 |  |  | $ | 42.63 |
Q3 2022 |  | 90,000 |  |  | $ | — |  |  | $ | 35.00 |  |  | $ | 42.63 |
Q4 2022 |  | 90,000 |  |  | $ | — |  |  | $ | 35.00 |  |  | $ | 42.63 |
Oil Basis (Bbl) |  |  |  |  |  |  |  |
Q1 2022 |  | 240,000 |  |  | $ | 0.41 |  |  | $ | — |  |  | $ | — |
Q2 2022 |  | 240,000 |  |  | $ | 0.41 |  |  | $ | — |  |  | $ | — |
Q3 2022 |  | 240,000 |  |  | $ | 0.41 |  |  | $ | — |  |  | $ | — |
Q4 2022 |  | 240,000 |  |  | $ | 0.41 |  |  | $ | — |  |  | $ | — |
Interest Rate Contracts The Company has entered into floating-to-fixed interest rate swaps (we receive a floating market rate equal to one-month LIBOR and pay a fixed interest rate) to manage interest rate exposure related to the Company's revolving credit facility. The following table summarizes the open interest rate derivative positions as of December 31, 2021:
Open Coverage Period |  | Notional Amount |  | Fixed Rate
|  | (In thousands) |  |
Floating-to-Fixed Interest Rate Swaps |  |  |  |
January 2022 - September 2023 |  | $ | 40,000 |  |  | 0.24 | %
Balance Sheet Presentation of Derivatives The following table presents the location and fair value of the Company’s derivative contracts included in the consolidated balance sheets as of December 31, 2021 and September 30, 2021:
|  | December 31, 2021
Balance Sheet Classification |  | Gross Fair Value |  | Amounts Netted |  | Net Fair Value
|  | (In thousands)
Current derivative assets |  | $ | 281 |  |  | $ | (198) |  |  | $ | 83 |
Non-current derivative assets |  | 267 |  |  | — |  |  | 267 |
Current derivative liabilities |  | (31,182) |  |  | 198 |  |  | (30,984) |
Non-current derivative liabilities |  | (9,515) |  |  | — |  |  | (9,515) |
Total |  | $ | (40,149) |  |  | $ | — |  |  | $ | (40,149) |
|  | September 30, 2021
Balance Sheet Classification |  | Gross Fair Value |  | Amounts Netted |  | Net Fair Value
|  | (In thousands)
Current derivative assets |  | $ | 186 |  |  | $ | (186) |  |  | $ | — |
Non-current derivative assets |  | 228 |  |  | (122) |  |  | 106 |
Current derivative liabilities |  | (42,330) |  |  | 186 |  |  | (42,144) |
Non-current derivative liabilities |  | (9,054) |  |  | 122 |  |  | (8,932) |
Total |  | $ | (50,970) |  |  | $ | — |  |  | $ | (50,970) |
The following table presents the components of the Company's loss on derivatives for the three months ended December 31, 2021 and 2020:
| Three Months Ended December 31,
| 2021 |  | 2020
| (In thousands)
Settlements on derivative contracts | $ | (16,014) |  |  | $ | 5,173 |
Non-cash gain (loss) on derivatives | 10,821 |  |  | (19,082) |
Loss on derivatives | $ | (5,193) |  |  | $ | (13,909) |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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